UK’s Economic Crime Plan 2023-2026

Last March the UK Government released its second Economic Crime Plan spanning 2023 through to 2025. It expands on the first plan which was designed to highlight the importance of the private sector going beyond legal requirements in order to prevent and detect financial crime.

The first plan was also tasked with improving understanding of economic crime threats through joint public-private risk assessments and strengthening regulatory frameworks including reform of the Suspicious Activity Report (SAR) as well as a comprehensive review of the Money Laundering Regulations (MLRs).

---

RELATED ARTICLES:

FCA Applications

The Consumer Duty, what now?

Regulatory Round up: October 2023

RELATED RESOURCES:

AML and Financial Crime (2023)

---

The new plan aims to strengthen the system of industry leadership in order to identify new and emerging threats, through an improved collective understanding of risk and prioritisation. This should drive consistent performance across a range of sectors, including both public and private, through two major focus areas:

Improved information sharing

The National Economic Crime Centre (NECC) coordinates information sharing across a number of key organisations. This has traditionally been formed of the NCA, Home Office, Treasury, FCA, HMRC, OPBAS and the Insolvency Service but, under the new plan, will be expanded to include Companies House. The group will assess economic crime vulnerabilities, prioritise opportunities for joint activity, develop risk indicators to support Companies House monitoring and investigation of existing companies and partnerships.

Structural reform

The main bulk of the changes are structural reforms designed to better regulate and take action against key risks, they include:

1. Companies House has been provided with additional legal powers. The Economic Crime and Corporate Transparency Act 2023 is now law and reforms the role of Companies House with the aim of improving transparency in relation to UK companies and partnerships. The Act has provided the Registrar of Companies with enhanced powers, enabling them to become a more active gatekeeper over company creation and custodian of more reliable data concerning companies and partnerships. Companies House is now able to verify the identities of those setting up, managing, and owning companies, use enhanced intelligence capabilities to challenge and reject information filed with it, and proactively share information where it has evidence of anomalous filings or suspicious behaviours. This includes the roll-out of ID verification to new and existing directors, partners, presenters and People with Significant Control (CH).

2. Powers will also be provided to Companies House to require companies to change their name where it appears they are set up with the intention to defraud.

3. A new “crypto cell” comprising law enforcement, regulators and experts to pool expertise to take action against financial crime in cryptocurrencies.

4. Enhanced law enforcement capacity and capability to pursue and prosecute the use of crypto/virtual assets to launder illicit finance. This is mainly based around training for front line teams to be able to recognise such crime. Furthermore the FCA will, in late 2024, update their crypto registration web pages and provide tailored communications where necessary to build understanding of crypto asset regulations including examples of good and poor practices, expectations at the authorisations gateway, and planned reforms (FCA).

5. Reform of the use of data from SARs. The programme of improvement began in 2019 to address variations in compliance reporting in some parts of the AML regulated sector and under reporting in others, increase the utilisation of SARs by law enforcement, modernise the technology used for SARs reporting and analysis, and increase the capacity of the UK Financial Intelligence Unit (UKFIU), hosted within the NCA. The programme has already completed the delivery of increased staff in the UKFIU and Regional Organised Crime Units (ROCUs) and delivered the first beta release of the new SARs Digital Service improving reporting and data quality. Improved collaboration with the National Data Exploitation Centre (NDEC) now means that every SAR is matched against relevant data sets and used multiple times. The programme will also deliver legislative exemptions through the Economic Crime and Corporate Transparency Bill to reduce the regulatory burden on business.

6. Leading the cross-system operational response to more effectively identify and resolve financial crime.

There is also a major focus on dealing with kleptocracies to better track the use of financial centres, such as the UK, to launder money gained from an abuse of power. A major tool in dealing with kleptocracies is sanctions, therefore the strategy aims to reduce the chance of sanctions evasion through:

• Sharing examples of sanctions evasion to enable firms to learn

• The FCA will be expanding their data collection in order to drive improvements in the performance of regulated firms

• Enhance OFSI’s existing methods of engagement to enhance the scope of sectors and continuously improve the methods and approach OFSI uses to engage with public, private sector and supervisors

• Review and expand where necessary on published OFSI enforcement guidance, OFSI licencing framework and future legislative needs to continuously improve financial sanctions

This second plan seeks to build on the foundations laid in the first Economic Crime Plan - to focus more directly on impact and outcomes, and in turn help to cut crime, protect our national security, and support the UK’s legitimate economic growth and competitiveness. We encourage clients to watch for updates as the plan takes effect as several of these could impact firm operations.

Our online AML and Financial Crime training course takes learners through the basics of Anti-Money Laundering and Financial Crime, covering types of crimes, responsibilities, legislation, fraud and AML expectations, due diligence, reporting and recording. Each online course, priced at just £20, is accessible at the delegate’s convenience, and provides a certificate upon successful completion, allowing firms to track and record each user’s progress.

For large groups, we can offer a simplified enrolment service and pricing, simply email Robert.bell@rbcompliance.co.uk.